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OST-2000-7513

U.S.- Ecuador All Cargo Frequency Allocations

By:  Paul Gretch

U.S.- Ecuador All Cargo Frequency Allocations

Arrow requests allocation of the three weekly U.S.-Ecuador all-cargo frequencies previously held by Kitty Hawk International. Arrow currently holds three weekly U.S.-Ecuador all-cargo frequencies, which it is utilizing. If awarded the three additional frequencies Arrow will provide 6 weekly U.S.-Ecuador flights, Monday through Saturday. Arrow proposes to operate the 3 new frequencies on a Miami -Guyaquil - Quito - Miami routing. 

Counsel:  Arrow, Allan Markham, 202.337.2149

Counsel:  Verner Liipfert, John Mietus, 202.37.6000

Counsel:  Steptoe Johnson, David Coburn, 202.429.3000

Counsel:  Pierre Murphy, 202.872.1725, pmurphy@lopmurphy.com 

Counsel:  Roller Bauer, Moffet Roller, 202.331.3300, airlaw@rollerbauer.com

U.S.- Ecuador All Cargo Frequency Allocations

The primary problem with all three of the foregoing proposals is a lack of flexibility of more frequent service with narrow-body equipment. Operating widebody equipment only one, two, or three times per week throughout the year will result in inadequate service during the peak periods and extensive over-capacity in other periods. Arrow's experience in this market clearly indicates that more frequent narrow-body service is superior to less frequent wide body service. Furthermore, in the proposals of Atlas and Gemini is the serious risk that frequencies will be wasted if the full and continuing acceptance of their proposals by the Ecuadorian government is not available on a continuing basis.

Counsel:  Allan Markham, 202.337.2149

An award to either Fine Air or its sister company, Arrow Air, would be still more contrary to the public interest. Financial difficulties continue to beset their parent company, and there are substantial concerns about the ability of either carrier to use additional U.S. -Ecuador frequencies effectively. Further, these carriers together hold more than one-third of the remaining twelve U.S. carrier frequencies and, with the acquisition of Challenge Air Cargo by UPS, would dominate the market for scheduled, general cargo service. The addition of a strong, new carrier like Atlas is necessary to restore a competitive balance to the U.S. -Ecuador scheduled market, Atlas has made a realistic service proposal with an aircraft that is well-suited to the demands of U.S. -Ecuador service.

Counsel:  Verner Liipfert, William Evans

It would be contrary to the public interest to allow a further concentration of limited U.S.-Ecuador all-cargo frequencies by award of all the additional frequencies at issue to either Fine or Arrow or to the surviving carrier if the merger is approved. When it last allocated these three U.S.-Ecuador all-cargo frequencies in 1997 (to AIA/Kitty Hawk), the Department denied separate applications of Arrow and Fine for additional frequencies on the ground that "our overall goals in the U.S.-Ecuador all-cargo market would be best served by adding new competition rather than authorizing incumbent carriers to increase their services.' The planned merger of Arrow and Fine, which would reduce to two the number of scheduled all-cargo carriers with authority to operate in the U.S.-Ecuador market, provides an even stronger reason for the Department to continue to adhere to this policy in reallocating the three available frequencies. Moreover, for reasons discussed herein, Evergreen's application is the far superior one in any event and would bring a strong new competitor to the U.S.-Ecuador all-cargo market.

Counsel:  Evergreen and Steptoe Johnson, Richard Taylor, 202-429-3000

As stated below, Fine Air's proposal to expand its current, successful, truly scheduled U.S.-Ecuador all-cargo operations would provide the best and most immediate use of these valuable scheduled frequencies in this limited-entry market. The shipping customers in this market, major corporations (e.g., Sony) as well as the large freight forwarders (e.g., Airborne, Danzas, BAX Global, etc.) clearly desire the, availability of frequent scheduled services in the market as opposed to once or twice-per-week widebody, charter-type service proposed by the other applicants.

Counsel:  Elizabeth Collins, 202.872.1679, ecollins@lopmurphy.com 

The proposal of Gemini Air Cargo, Inc., to operate scheduled all-cargo service to Ecuador is superior in every respect to the proposals submitted by Atlas, Evergreen, Arrow, and Fine in their competing applications in this docket. The Department should therefore grant-an exemption to Gemini and grant Gemini the three available frequencies in order for Gemini to operate scheduled all-cargo service twice a week between Miami, Florida, on the one hand, and Quito and Guayaquil, Ecuador, on the other, using Gemini DC10-F freighter aircraft.

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300

U.S.- Ecuador All Cargo Frequency Allocations

Counsel:  Arrow, Allan Markham, 202.337.2149, awmpc@aol.com 

Counsel:  Verner Liipfert, William Evans, 202.371.6000

Counsel:  Steptoe Johnson, David Coburn, 202.429.3000, dcoburn@steptoe.com 

Counsel:  Elizabeth Collins, 202.8721679, ecollins@lopmurphy.com 

Counsel:  Roller Bauer, Moffet Roller, 202, 331.3300, mroller@rollerbauer.com

U.S.- Ecuador All Cargo Frequency Allocations

Polar is seeking authority from Ecuador to operate cargo charters because of its plans to implement a programmed series of northbound U.S.-Ecuador cargo charters, plans which it has been unable to implement to date due to the application process in Ecuador. Unfortunately, a Polar employee, aware of Polar's initially planned start-up date for this charter program, mistakenly assumed that the Quito stops were to be operated on a scheduled basis because of the regularity of the flight schedule. The employee, therefore, included the flights in a list of schedules sent to the OAG Cargo Guide for publication. Once Polar learned of the mistake on June 5, 2000, it instructed the OAG to eliminate these flights from Polar's schedules included in the Guide. Because the OAG requires 60 days notice for changes to published schedules, the Quito stops will be dropped from the Guide after August 5, 2000.

Counsel:  Wilmer Cutler, Bruce Rabinovitz, 202.663.6960, brabinovitz@wilmer.com  

U.S.- Ecuador All Cargo Frequency Allocations

Counsel:  Verner Liipfert, William Evans, 202.371.6000

U.S.- Ecuador All Cargo Frequency Allocations

On June 15, 2000, the Department served a Notice requesting carriers interested in providing all-cargo service to Ecuador to file applications in Docket OST-2000-7513. Arrow Air, Inc. and Fine Air Services, Inc. filed separate applications for additional Ecuador frequencies.

On August 4, 2000, the Department served Order 2000-8-5, which transferred the certificates, exemption authority and frequency allocations of Fine Air Service, Inc. to Arrow Air, Inc. d/b/a Fine Air and d/b/a Arrow Air, and revoked all remaining authority held by Fine. As a result of this transfer Arrow Air, Inc. now holds a total of 5 frequencies for U.S.-Ecuador services (three originally allocated to Arrow and two which had been allocated to Fine).

We request clarification of how the August 4 transfer of authority affects the prior positions expressed by Arrow and Fine in response to our June 15 notice. Please indicate any changes to previously stated positions and proposals and include such detail as necessary to permit other parties to provide a meaningful response. Please also indicate if both Fine and Arrow intend to continue prosecuting their applications. Your response(s) should be filed in Docket OST-2000-7513 and served on all parties of record in Docket OST-2000-7513. Your response(s) should be filed no later than seven calendar days from the date of this letter. The other parties should provide their comments in response no later than fourteen calendar days from the date of this letter.

By:  Paul Gretch

U.S.-Ecuador All-Cargo Frequency Allocation

The Department is correct that in Order 2000-8-5 the merger of Fine Air's operations and authorities into Arrow Air's was approved, including the two (2) weekly Ecuador frequencies previously awarded to Fine Air. See DOT Order 95-2-19. With this recent Departmental approval, the merger of the operations of Fine Air into Arrow Air can now proceed and is underway.

Joint Supplement of Fine Air Services, Inc. and Arrow Air, Inc. To Applications for Allocation of All-Cargo Frequencies 3. However, the issue of how the then-pending route transfer application would affect the frequency allocation applications of Fine Air and Arrow Air in the 6vent of a an approval of the merger has been addressed by Fine Air, and the parties herein were afforded the opportunity to respond. In June, Fine Air stated:

Fine Air has taken no position on the application of Arrow Air, Inc. As the Department and parties are aware, both Fine Air and Arrow are under the common ownership and control of Fine Air Services Corp. See DOT Order 99-4-5, Exemption approving acquisition of Arrow by Fine Air Service Corp. The application of Fine Air and Arrow Air for de facto route transfer dated February 23, 1999, subsequently amended to seek approval of a full merger of Fine Air, Inc. Into Arrow Air, Inc. remains pending in Docket OST-99-5140. Pursuant to Order 99-4-5, Fine Air -and Arrow are required to be run as two (2) separate air carriers, and Fine Air and Arrow are also both obliged to apply separately for the frequencies available herein. In the event Fine Air were awarded any frequencies herein, those frequencies and all of Fine's other authorities would be transferred to the merged carrier, Arrow Air. See Fine Air Consolidated Answer, 1-2, n.2. 4.

Procedurally therefore, with the issuance of Order 2000-8-5 now permitting the merger of Fine Air into Arrow Air to be implemented, the application herein of Arrow Air for the three (3) frequencies available for reallocation stands -unchanged. To the extent necessary, the application of Fine Air is hereby withdrawn.

Counsel:  Allan Markham, 202-337-2149, awpmc@aol.com for Arrow / Pierre Murphy, 202-872-1679, pmurphy@lopmurphy.com for Fine Air

U.S.-Ecuador All-Cargo Frequency Allocation

The Department's recent approval of the Arrow/Fine merger transaction, and supplemental filing by Arrow/Fine, underscore the fact that their merger has reduced to only two (Arrow/Fine and Challenge) the number oi carriers in the U.S.- Ecuador market, following on the heels of Kitty Hawk's departure from the market. In denying Fine's 1997 application to increase its allocation of U.S-Ecuador frequencies, the Department stated that it favors the entry of new competitors in the frequency restricted U.S.-Ecuador market: "we have tentatively decided that our overall goals in the U.S.-Ecuador all-cargo market would be best served by adding new competition rather than authorizing incumbent carriers to increase their services. Order 97-7-14, at page 5. In view of the reduction in the .number of competitors in that market resulting from the Arrow/Fine merger (Arrow/Fine now hold 5 of the 15 available frequencies), and the fact that Challenge already controls 7 of those frequencies, the Department's pro new-entrant policy should be applied with even greater resolve now. For that reason alone, Arrow/Fine should not be allowed to further increase the frequencies that it holds through an award of the three frequencies at issue here.

Counsel:  Evergreen and Steptoe Johnson, Richard Taylor, 202-429-3000

U.S.-Ecuador All-Cargo Frequency Allocation

Order 2000-9-23 tentatively grants Gemini Air Cargo, Inc., an exemption to conduct scheduled all-cargo services in the U.S.-Ecuador market and tentatively allocates three weekly frequencies to conduct such operations. Objections due October 5, 2000.

By:  Susan McDermott

U.S.- Ecuador All Cargo Frequency Allocations

In its prior submissions in this proceeding, Evergreen raised a bona fide question, based on information about Gemini and its own prior public statements, as to whether Gemini would provide service to Ecuador in its own right or on behalf of some foreign carrier with which it might have an ACMI arrangement. By its own description, Gemini "specializes in providing contract cargo services for other airlines based on Aircraft, Crew, Maintenance and Insurance" and claims to be the "largest ACMI operator of DC-10-30F aircraft worldwide." See December 13, 1999 Gemini press release and related materials set forth as Attachment 7 to Evergreen’s June 30, 2000 Consolidated Reply in this proceeding. Gemini’s specialization in providing ACMI services was in fact the subject of a September 1, 2000 profile of the company in Air Transport World, a copy of which is attached. As that article reports, Gemini is the "world’s second-largest dedicated wet-lease cargo airline operating under" the ACMI concept.

Notwithstanding the serious questions that the ACMI nature of Gemini’s operations raise about whether it, or instead some foreign carrier for which it is providing such services, will in fact operate the U.S.-Ecuador rights that Gemini has now been tentatively awarded, the Department’s Show Cause Order is unfortunately silent on this issue. Evergreen submits that before the Department awards these valuable U.S. carrier rights in this limited entry market, it should require assurances from Gemini that it will in fact provide service as a U.S.-flag carrier in its own name, and not pursuant to ACMI or similar arrangements with another carrier, including a foreign carrier. Absent such assurances, the tentative award to Gemini should be vacated.

Counsel:  Steptoe Johnson, David Coburn, 202.429.3000, dcoburn@steptoe.com 

U.S.- Ecuador All Cargo Frequency Allocations

Evergreen focuses its criticism of the award to Gemini on the supposition that Gemini will provide the services it proposes as the nominee of "some foreign carrier." Evergreen premises this assertion on an article attached to its pleading. The article discusses the business Gemini has developed as an ACMI operator, and Evergreen concludes that the Department should seek "assurances from Gemini that it will in fact provide service as a U.S. flag carrier in its own name, and not pursuant to ACMI or similar arrangements with another carrier, including a foreign carrier." Evergreen further concludes that "[a]bsent such assurances, the tentative award should be vacated." 

The simple answer to this unfounded argument is that Gemini is happy to provide such "assurances." Gemini will seek and accept cargo on its U.S.-Ecuador flights from any qualified shippers, e.g., freight forwarders, consolidators, airlines interlining cargo, airlines acting as freight forwarders, etc. Evergreen and most U.S. cargo airlines operate in exactly the same manner.

Counsel:  Roller Bauer, Moffet Roller, 202, 331.3300, mroller@rollerbauer.com

U.S.- Ecuador All Cargo Frequency Allocations

We make final our tentative findings and conclusions in Order 2000-9-23, and grant Gemini Air Cargo an exemption to perform scheduled all-cargo services between the United States and Ecuador and allocate Gemini three weekly frequencies for its scheduled all-cargo services.

We stated in our tentative decision that Gemini's proposed service would best maximize the available rights under the agreement while benefiting shippers and promoting competition. We stated that of the new entrants, only Gemini would provide weekly service and would offer shippers a substantial degree of capacity on a weekly basis, dedicated to the U.S.-Ecuador market. We also noted that by selecting Gemini we would introduce a new competitor in the marketplace. No one has presented evidence that would alter our tentative findings.

While Evergreen has questioned the relative merits of Gemini's proposal as well as Gemini's method of operation, Evergreen has not overcome the flaw in its own proposal, namely, that its proposal, unlike Gemini's, is outside the prescribed terms of our bilateral agreement with Ecuador. As we said in Order 2000-9-23, at 5, we have no need to test the Ecuadorian willingness to permit Evergreen to operate as proposed in circumstances where another applicant, Gemini, has presented a proposal within the bilateral that promises a result that would serve the public interest. Against this background, and taking into consideration the statements and assurances provided by Gemini in its October 12 submission, we have decided to make final our tentative decision and to award Gemini the three available frequencies for all-cargo service to Ecuador.

By:  Susan McDermott

U.S.- Ecuador All Cargo Frequency Allocations

Gemini's plans for inaugurating scheduled service to Ecuador are proceeding well. Gemini is hopeful that it can begin scheduled all-cargo service between the United States and Ecuador by the end of January 2001, but considers it unlikely that it will be able to do so before January 21, 2001, the date on which Gemini's 90-day start-up period expires.

Gemini is contracting with shippers to use its new service to Ecuador and is also working to obtain all authority from the Government of Ecuador. Because Gemini does not know when the Government of Ecuador will issue the authority that it needs, it is difficult for Gemini to predict the exact date on which it will introduce its new service. Gemini is hopeful, however, that an extension through April 23, 2001 should be adequate.

The two weekly DC-10-30F flights that Gemini plans to operate to Ecuador will make the best use of the three U.S.-Ecuador frequencies that were at issue in the above proceeding.

Counsel:  Roller Bauer, Moffet Roller, 202, 331.3300, , airlaw@rollerbauer.com 

Gemini Air Cargo

By Order 2000-10-19, the Department granted Gemini Air Cargo, Inc. (a) an exemption to engage in scheduled foreign air transportation of property and mail between Miami, Florida, on the one hand, and Quito and Guayaquil, Ecuador, on the other, (b) an exemption to integrate such authority with Gemini's existing certificate and exemption authority, and (c) an allocation of three weekly frequencies (narrow-body aircraft or wide-body equivalent) for services in the United States--Ecuador market Gemini's frequency award was subject to a 90-day startup condition as well as our standard 90-day dormancy condition. Gemini states that while its plans for inaugurating scheduled service to Ecuador are proceeding well, it has not yet received the necessary authority from the Government of Ecuador for such operations, and does not expect such authorization before January 21, the date by which Gemini is required to start its service. Gemini states that it is hopeful that an extension through April 23, 2001, will be adequate and, therefore, requests an extension of the startup period through April 23, 2001.

By:  Paul Gretch

U.S.- Ecuador All Cargo Frequency Allocations

In January of this year, when Gemini first requested an extension, Gemini anticipated that it would receive authority from Ecuador relatively promptly. The extended delay in receiving scheduled operating authority from Ecuador has hindered the ability of Gemini to initiate scheduled all-cargo service in that market.

Secondly, market conditions do not presently support the introduction of scheduled all-cargo service between the United States and Ecuador. Cargo traffic from the United States to Ecuador is virtually nil at present. Exports from Ecuador to the United States are similarly constrained. Exports from Ecuador are very seasonal, and this is a very low period for such shipments.

Gemini would be willing to incur some losses in order to enter and develop the market since breaking even or making a profit are not realistic expectations at this time. Gemini has tried diligently and without success, however, to find shippers willing and able to provide sufficient loads to allow Gemini to commence service at even a moderate degree of loss. Shippers familiar with the Miami-Quito market expect that the situation will soon begin to turn, and they are very interested in using Gemini's services in that market as soon as market conditions permit.

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300

U.S.- Ecuador All Cargo Frequency Allocations

Evergreen International Airlines, Inc. urges the Department to deny Gemini Air Cargo's eleventh hour request for an exemption to give Gemini an additional three months, beyond the current April 23, 2001 start-up deadline, to implement the valuable scheduled U.S.-Ecuador all-cargo award Gemini received in this case by order 2000-10-19 on October 23, 2000. Gemini asks that its implementation deadline be extended until July 23, 2001 notwithstanding its report that the Ecuadorian government "has either issued, or is about to issue, scheduled operating authority to Gemini." As discussed below, Evergreen disagrees with Gemini's contention that the market cannot support its flights at this time.

Counsel:  Steptoe Johnson, David Coburn, 202.429.3000, dcoburn@steptoe.com 

Counsel:  Roller Bauer, Moffett Roller

By:  Paul Gretch

U.S.- Ecuador All Cargo Frequency Allocations

Gemini requests this further extension due to the continued delay in obtaining scheduled authority from the Government of Ecuador. According to the attached letter from the Government of Ecuador, dated July 12, 2001, Gemini's application will be the subject of a public hearing on August 7, 2001, and Gemini is complying with all of the requirements for the hearing as set forth in the letter.

In its letter, however, the Government of Ecuador states that it has made further consideration of the Gemini application expressly contingent upon Gemini obtaining an extension from the Department of Transportation of the present start-up deadline of July 22, 2001. As the Department understands, the licensing process in Ecuador is more lengthy than would be desired, but the Ecuadoran authorities appear to be close to granting authority to Gemini. Gemini understands from its representatives in Ecuador that the Ecuadoran Government should issue authority to Gemini very shortly after the hearing on August 7. Since receiving U.S. authority to Ecuador, Gemini has faithfully pursued its efforts to satisfy the requirements of the Government of Ecuador for issuance of operating authority. In view of the long effort expended by Gemini, it would not be in the public interest for the Department to deny this Application to extend the startup deadline, especially when Evergreen or any other airline designated by the United States would itself face a months-long licensing delay.

Counsel:  Roller Bauer, Moffet Roller, 202, 331.3300, mroller@rollerbauer.com

By Order 2000-10-19, the Department granted Gemini Air Cargo, Inc. (a) an exemption to engage in scheduled foreign air transportation of property and mail between Miami, Florida, on the one hand, and Quito and Guayaquil, Ecuador, on the other, (b) an exemption to integrate such authority with Gemini's existing certificate and exemption authority, and (c) an allocation of three weekly frequencies (narrow-body aircraft or wide-body equivalent) for services in the United States- Ecuador market. Gemini's frequency award was subject to a 90-day startup condition as well as our standard 90-day dormancy condition. Under the award Gemini was required to begin service before January 21, 2001. On January 19, 2001, the Department granted Gemini an extension of the startup requirement through April 23, 2001. On April 23, 2001, the Department granted Gemini a further extension of the startup requirement through July 22, 2001.

By:  Paul Gretch

 U.S.- Ecuador All Cargo Frequency Allocations 

Due to the presence of Ecuadoran aviation officials in Washington for bilateral aviation consultations, the Government of Ecuador postponed the hearing on the Gemini application for approximately one week, to August 15, 2001. Gemini will advise the Department as soon as it learns of the results of the rescheduled hearing. Gemini will endeavor to make that submission by August 16, 2001. Gemini will at that time also identify any further procedural steps that must be completed for Gemini to receive its Ecuadoran license.

Counsel:  Roller Bauer, Moffet Roller, 202.331.3300, airlaw@rollerbauer.com

U.S.- Ecuador All Cargo Frequency Allocations

Following the close of business in Washington on August 17, 2001, Gemini received the attached "Official Communique" that the Ecuadoran Aviation Council had forwarded earlier the same day to Gemini's representative in Ecuador. The Communique states that the Aviation Council has resolved to approve Gemini's application, but this document does not state whether Gemini holds current authority, as understood by Gemini.

Gemini will immediately clarify the status of its application to operate to Ecuador. Gemini will fulfill as quickly as possible all additional requirements imposed by the Ecuadoran authorities. Gemini will advise the Department as soon as it has this additional information. Because it is unlikely that Gemini will be able to provide any further information before the temporary waiver expires on August 20, 2001, Gemini requests that the Department approve the balance of the 90-day waiver that Gemini requested in its Application of July 20. In the alternative Gemini requests the Department to extend the waiver for another 30 days to allow Gemini sufficient time to initiate scheduled service using the Ecuadoran authority that Gemini believes is imminent if not already in effect.

Counsel:  Roller Bauer, Moffet Roller, 202.331.3300, mroller@rollerbauer.com

By:  Paul Gretch

U.S.- Ecuador All Cargo Frequency Allocations

Counsel:  Atlas, Russell Pommer, 202.354.3843, rpommer@atlasair.com 

Counsel:  Steptoe Johnson, David Coburn, 202.429.3000, dcoburn@steptoe.com 

U.S.- Ecuador All Cargo Frequency Allocations

In their respective Answers, Atlas Air, Inc. and Evergreen International Airlines, Inc. do not object to a limited extension of the period during which Gemini Air Cargo must commence scheduled all-cargo service to Ecuador. Atlas states that it "believes that a waiver through September 20 ... is the maximum time period that should be deemed necessary." Atlas Answer, p.2. Evergreen states that the Department should grant an extension to a date no later than September 4. Evergreen Answer, p. 6. Gemini believes an extension to October 19 is appropriate solely to avoid the possibility of additional extension requests in the event Gemini's authority is delayed longer than presently anticipated. Gemini will, however, accept a condition that it must commence service within two weeks of the receipt of operating authority from the Government of Ecuador. Gemini remains hopeful that it can commence scheduled service on or about September 1.2001.

Counsel:  Roller Bauer, Moffet Roller, 202.331.3300, mroller@rollerbauer.com

Gemini Air Cargo

By:  Paul Gretch

U.S.- Ecuador All Cargo Frequency Allocations

Gemini is continuing to exercise every measure available to it to introduce scheduled all-cargo service to Ecuador. Pending receipt of scheduled all-cargo authority from the Government of Ecuador, Gemini will immediately begin the operation of regular charter service to Ecuador, commencing on September 6, 2001. Gemini plans to operate one charter flight per week thereafter until October 15, 2001, when it plans to start operating two charter flights per week. These flights will convert to scheduled service as soon as permitted by the Government of Ecuador. As detailed below, Gemini continues to work through its representatives in Ecuador and with the representatives of the Government to secure scheduled all-cargo authority. Ultimately, however, the timing of the final issuance of such authority is within the exclusive purview and control of the Government of Ecuador.

Gemini will initiate service to Ecuador on September 6, 2001. Gemini is making every effort to complete immediately its compliance with Ecuadoran licensing requirements, but the licensing process will not likely be completed before mid-October. For that reason, Gemini therefore renews its request to extend the deadline for Gemini to start service to Ecuador to October 19, 2001.

Counsel:  Roller Bauer, Moffet Roller, 202.331.3300, mroller@rollerbauer.com

U.S.- Ecuador All Cargo Frequency Allocations

On August 29, 2001, Gemini submitted a further supplement to its original application for an extension of the startup deadline. In the latest supplement, Gemini states that it is continuing to work with its representatives in Ecuador and with government representatives to secure scheduled all-cargo authority. Gemini states that it will begin operating regular charter service to Ecuador on September 6, 2001, and that it plans to operate one charter flight per week thereafter until October 15, 2001, when it plans to operate two charter flights per week, and that these flights will convert to scheduled service as soon as permitted by the Government of Ecuador. Gemini identified the evidentiary items required by the Ecuador government for completion of the licensing process and Gemini's proposed time-line for submission of each item. Gemini also noted that it had dispatched its Senior Vice President of Marketing to Ecuador to facilitate completion of the requested evidentiary items. stating that its representative would remain until any and all uncertainties regarding the issuance of Gemini's Ecuadorian authority are resolved.

We have decided to grant the balance of Gemini's pending requests for extension through October 19, 2001. Gemini's latest submission supports a finding that the carrier is currently making a good faith effort to secure the necessary license from Ecuador and, thus, that extension of the startup deadline is warranted.
We will, however, require Gemini to file on a weekly basis in the docket (and to serve on all parties in this proceeding) a letter apprising the Department of its progress toward meeting the evidentiary requirements of the Ecuador government, including whether it has met its target dates for completion of each evidentiary item, and, if not, an explanation as to why it did not. We also expect written notification in this docket (with service on all parties) of the operation of any charter flight (date, aircraft, and routing) until the carrier begins its scheduled operations, as well as notification and explanation by Gemini should it not operate any of the planned charter flights cited in its August 29 submission.

By:  Paul Gretch

U.S.- Ecuador All Cargo Frequency Allocations

Counsel:  Roller Bauer, Lee Bauer, 202.331.3300

U.S.- Ecuador All Cargo Frequency Allocations

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300

U.S.- Ecuador All Cargo Frequency Allocations

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300

U.S.- Ecuador All Cargo Frequency Allocations

Counsel:  Roller Bauer, Lee Bauer, 202.331.3300

U.S.- Ecuador All Cargo Frequency Allocations

Gemini Air Cargo, Inc. respectfully requests the Department to renew through November 19, 2001, the exemption extending Gemini's deadline for starting U.S.-Ecuador scheduled all-cargo service. Gemini seeks this extension to address the contingency that the Government of Ecuador may not grant Gemini authority to operate scheduled all-cargo service to Ecuador by the current startup deadline of October 19, 2001.

As Gemini stated in its letter report of October l, 2001, Gemini believes that it has fulfilled all of the licensing requirements of the Government of Ecuador except for the submission of an authenticated copy of the minimum equipment list (MEL) for its MD-11 aircraft. Gemini received that request on September 21, 2001, promptly acted upon it, and expects to file the authenticated MEL very shortly. Gemini is very hopeful that this application will become moot because of the issuance of Ecuadoran authority in sufficient time for Gemini to start scheduled service by the current deadline of October 19.

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300

U.S.- Ecuador All Cargo Frequency Allocations

Since its last Interim Report, Gemini has operated one charter flights to Ecuador on October 9, 2001, on the routing Miami (MIA) - Quito (UIO) - Guayaquil (GYE) - Miami (MIA). Gemini plans to operate its next charter flight to Ecuador on the same routing on October 11, 2001.

As also stated in its Third Interim Report, Ecuadoran officials requested on September 21, 2001, a copy of Gemini’s minimum equipment list (MEL) for the MD-11 aircraft. Upon receipt of the request for the MD-11 MEL, Gemini promptly initiated the process of obtaining an authenticated copy of the MEL pursuant to the authentication process that Gemini described in its prior filings. Gemini has now obtained the authenticated MD-11 and forwarded it to its representative in Ecuador for filing. Gemini anticipates that the MD-11 MEL will be filed in Ecuador on October 10 or October 11.

Gemini reported in its Third and Fourth Interim Reports, that it understood that the Government of Ecuador would issue Gemini scheduled authority no later than October 19, 2001. Gemini has received no information to the contrary, and Gemini will file this week the last document requested by the Government of Ecuador. In view of the possibility, however, that the Government of Ecuador may not grant scheduled authority to Gemini by October 19, 2001, its current startup deadline pursuant to the NOAT of September 6, 2001 (or that such authority might be granted so close to October 19 that Gemini would not have enough time to initiate scheduled service before the deadline), Gemini filed in this docket on October 3, 2001, an application for a one month extension of the startup deadline. Gemini remains hopeful, however, that it will receive scheduled authority from the Ecuadoran authorities and be able to start scheduled service within the next ten days.

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300

Because frequency assignments in limited-entry markets are valuable bilateral rights, the Department ought to be vigilant to ensure that carriers do not use the foreign licensing process to excuse startup delays. Here, it has been almost a year since the award. In its First Interim Report, dated September 10, 2001, Gemini advised that it expected to meet another Ecuador licensing requirement the establishment of a corporate entity in Ecuador by October 12, 2001. Gemini has not subsequently changed that estimate, so we can only assume the requirement has been satisfied or, if not, is not an impediment to prompt completion of the licensing process.

Should Gemini be unable to start Ecuador service by October 19, the Department can rest assured that the frequencies assigned last year to Gemini will promptly be put to good use. Atlas remains eager to start scheduled freighter service to/from Ecuador' and is prepared to do so extremely expeditiously notwithstanding recent world events.

Counsel:  Atlas, Russell Pommer, 202.354.3843, rpommer@atlasair.com 

U.S.- Ecuador All Cargo Frequency Allocations

Gemini operated a charter flight to Ecuador on October 12/13, 2001, on the routing Miami (MIA) - Quito (UIO) - Guayaquil (GYE) - Miami (MIA). Gemini has no charter flights scheduled to Ecuador at this time, but anticipates that it will operate additional charter flights to Ecuador very shortly and that it will continue to operate charter flights until Gemini receives scheduled authority from the Ecuadoran Government. Gemini is unable to accommodate any requests for charter flights to Ecuador to be operated in the next several days since Gemini is providing capacity to help satisfy increased activity by the Air Mobility Command.

As stated in its Third Interim Report, Gemini has delivered to the appropriate officials of the Government of Ecuador all of the documents that were addressed in Gemini's first two Interim Reports. As also stated in its Third Interim Report, Ecuadoran officials requested on September 21, 2001, a copy of Gemini's minimum equipment list (MEL) for the MD-11 aircraft. Upon receipt of the request for the MD-11 MEL, Gemini promptly initiated the process of obtaining an authenticated copy of the MEL pursuant to the process that Gemini described in its prior filings. Gemini filed the authenticated MD-11 MEL with the Ecuadoran authorities on or about October 10 or 11, 2001.

As Gemini reported in its Third, Fourth, and Fifth Interim Reports, Gemini continues to understand that the Government of Ecuador will issue Gemini scheduled authority no later than October 19, 2001. Gemini has received no information to the contrary, and Gemini has filed all of the documents requested by the Government of Ecuador.

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300, airlaw@rollerbauer.com 

U.S.- Ecuador All Cargo Frequency Allocations

The basis for Atlas' objection is essentially that prior extensions should have been enough time for Gemini to obtain authority from Ecuador, regardless of the current status of Gemini's Ecuadoran application. Atlas' argument is unsupported, however. The Atlas Answer contains no information regarding the time necessary for a U.S. airline to satisfy Ecuadoran licensing procedures, and Atlas provides the Department with no assurance that Atlas could obtain scheduled authority from Ecuador any faster than Gemini.

Gemini continues to inquire regarding the status of its scheduled authority through its representative in Ecuador and through the U.S. Embassy in Ecuador. The most recent information that Gemini has received is that the Gemini application is awaiting final action by the Directorate of Civil Aviation (DAC).

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300

By:  Paul Gretch

U.S.- Ecuador All Cargo Frequency Allocations

Gemini has not operated charter flights to Ecuador since its last Interim Report. Gemini has no charter flights scheduled to Ecuador at this time, but, as stated in its last Report, Gemini anticipates that it will operate additional charter flights to Ecuador shortly and that it will continue to operate charter flights until Gemini receives scheduled authority from the Ecuadoran Government.

Since Gemini filed its last, Interim Report, the National Aviation Council (Consejo Nacional de Aviacion Civil) indicated hat Gemini should submit a notarized copy of the official License for the Gemini Office in Ecuador as issued by the "Superintendente de Compaiiias." Gemini obtained a notarized copy yesterday, October 22, 2001, and is filing it with the Consejo today. With the submission of this additional document, Gemini believes that it has submitted all required documents . Gemini is therefore waiting to receive authority to operate scheduled all-cargo service to Ecuador.

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300, airlaw@rollerbauer.com 

U.S.- Ecuador All Cargo Frequency Allocations

Gemini has not operated charter flights to Ecuador since its last Interim Report. At this time Gemini plans to operate three charter flights to Ecuador between October 31, 2001, and November 2, 2001.

In its last Report, filed October 23, 2001, Gemini stated that it believed that it had submitted all documents to the Ecuadoran authorities. Since that time, however, the Directorate of Civl Aviation (DAC) has advised Gemini that the DAC requires an MD-11 flight manual from the manufacturer in place of, or in addition to, the MD-11 Flight Crew Operating Manual that Gemini submitted. Gemini is obtaining an appropriately authenticated copy of the manual in question without delay and will file it with the DAC.

Gemini is continuing its efforts to obtain temporary scheduled operating authority from the National Aviation Council (Consejo Nacional de Aviacion Civil) pending final DAC certification of Gemini.

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300, airlaw@rollerbauer.com 

U.S.- Ecuador All Cargo Frequency Allocations

By: Paul Gretch 

U.S.- Ecuador All Cargo Frequency Allocations

Gemini seeks this extension to address the contingency that the Government of Ecuador may not grant Gemini authority to operate scheduled all-cargo service to Ecuador by the current startup deadline of November 19, 2001, or grants the authority on a date that does not allow Gemini sufficient time to commence scheduled service by November 19.

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300

Gemini operated one charter flight to Ecuador since the last Interim Report. Presently, Gemini has scheduled one charter flight to Ecuador that will operate during the period November 5 through 12, 2001.  

Gemini has advised the Department that the Directorate of Civil Aviation (DAC) of Ecuador is requiring Gemini to provide an MD-11 flight manual from the manufacturer in place of, or in addition to, the MD-11 Flight Crew Operating Manual that Gemini submitted. Gemini has notarized a copy of the MD-11 manual in question, and the Secretary of the Commonwealth of Virginia has affixed an apostille validating the notarization. Gemini expects to complete the authentication process at the U.S. State Department and at the Embassy of Ecuador today. Gemini anticipates that it will file the authenticated manual in Ecuador on November 7 or 8.  In addition Gemini has obtained a certified copy of the Notice of Action Taken by the Department on November l, 2001, extending Gemini's startup deadline through November 19, 2001, and it will file this certified copy in Ecuador along with the authenticated MD-11 manual. As Gemini has advised in its past reports, the company is continuing its efforts to obtain temporary scheduled operating authority from the National Aviation Council (Consejo Nacional de Aviacion Civil) pending final DAC certification of Gemini. Gemini cannot, however, explain the reason for the continuing delay in its receipt of scheduled authority. The submission of one additional MD-11 manual should not be a factor since Ecuador is currently permitting Gemini to conduct charter flight operations that do not differ from scheduled operations insofar as this manual is concerned. Gemini will nonetheless submit the authenticated copy of the MD-11 manual within the next several days

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300

U.S.- Ecuador All Cargo Frequency Allocations

It has now been over a year since the Department awarded U.S.-Ecuador route authority and three narrow-body all-cargo frequencies to Gemini in a carrier selection proceeding. As Atlas explained in detail in its October 10, 2001 answer to Gemini's fourth request for an exemption from the start-up condition, Gemini has been asserting repeatedly since January that it was close to securing a license for scheduled service from Ecuador's Directorate of Civil Aviation. Inexplicably, Gemini has been unable to complete the process.

Gemini has dealt with its lack of success in navigating through the Ecuadorian licensing process by filing a seemingly unending string of start-up exemption requests. At some point, before granting another start-up exemption, the Department will need to determine whether Gemini has diligently prosecuted its application for a license and whether, therefore, the long delay is attributable to the Directorate of Civil Aviation (in which case it might be appropriate for the United States to express concern through diplomatic channels). Because Gemini already has had more than a year to secure an Ecuadorian license, the time to make that determination is now.

As stated in previous pleadings, the Ecuador rights awarded to Gemini need not go unused for long once they revert to the Department for failure to satisfy the start-up condition. Atlas remains eager and able to commence U.S.-Ecuador scheduled service at the earliest available opportunity.

Counsel: Atlas Air, Russell Palmer

U.S.-Ecuador All-Cargo Frequency Allocation

Gemini has two charter flights scheduled to operate to Ecuador during the period November 13 through 19, 2001. Gemini will supplement this Report with the number of charter flights operated in the past seven days.

Gemini has filed today an authenticated copy of the MD-11 Flight Crew Operating Manual as requested by the Ecuadoran Directorate of Civil Aviation (DAC). A certified copy of the Notice of Action Taken by the Department on November 1, 2001, extending Gemini’s startup deadline through November 19, 2001, is en route to Ecuador via Federal Express, and Gemini expects to file it with the Ecuadoran authorities on November 15 or 16. Gemini is attempting to obtain clarification of indications that the Government of Ecuador may be taking the position that Gemini may need to address several additional requirements.

Gemini understands that its representative has obtained the "Flight Dispatch License" ("licencia de despacho del vuelo") that the Ecuadoran authorities may be seeking. Gemini will advise the Department if Gemini has not satisfied this requirement. Gemini is uncertain regarding any recent reference to an "international operating certificate." If the reference is to DOT authority, Gemini submitted earlier this year a certified copy of Gemini’s certificate awarding Gemini authority to operate two scheduled all-cargo DC-10/MD-11 flights per week and has provided certified copies of each extension of the startup deadline that was a condition of the certificate. Gemini will seek clarification of this item. Gemini understands that the Ecuadoran Superintendency of Companies has recently requested authenticated documentation of Gemini’s corporate status in the United States. Gemini will promptly obtain such documentation and forward it for filing with the Superintendency of Documents. The Superintendency will then complete its processing of the Gemini application for corporate domicile in Ecuador, and Gemini can provide the Ecuadoran aviation authorities with the appropriate documentation. Gemini will advise the Department as soon as possible of the effect this requirement will have upon the timing of the issuance of final operating authority to Gemini. Gemini has pending in Ecuador an application for a temporary provisional permit to allow Gemini to operate scheduled all-cargo service during while the final documentation requirements are being satisfied. In this regard, Gemini would appreciate any and all assistance that the U.S. Embassy in Quito and the Department might be able to provide to facilitate the issuance of interim authority to Gemini.

Counsel:  Roller Bauer, Moffett Roller

U.S.- Ecuador All Cargo Frequency Allocations

Gemini operated two charter flights during the period from October 29 through November 5. One flight operated on November 1/2 and the other on November 3/4. In its Ninth Interim Report, dated November 5, 2001, Gemini reported that it had operated only one flight during that time period. Gemini next operated to Ecuador on November 13/14 and November 15/16.  Gemini plans to operate its next charter flight to Ecuador on November 18.

In order to complete the requirements of the "Superintendente de Compaftias" that apply to the establishment of a corporate presence or domicile in Ecuador, Gemini understands that it must provide a specific "Certificate of Incorporation and Functioning" issued by the Embassy of Ecuador in Washington verifying that Gemini is a legal corporation authorized to do business in the United States. To qualify for this certificate Gemini must provide the Embassy with a certificate of good standing and authenticated copies of its bylaws and articles of incorporation. Gemini has already provided a good standing certificate and a notarized copy of its bylaws to the aviation authorities in Ecuador, but the company must apparently submit additional copies of these copies to Ecuadoran authorities here in Washington.

Because there are many variables, it is difficult for Gemini to state when the process to obtain a Certificate of Domicile and then to receive final authority will be completed, but Gemini believes that it is reasonable to expect that all requirements can and will be satisfied within the extension of the startup deadline to December 19 as Gemini has requested in its pending Application for Renewal of Exemption From Startup Deadline filed in this docket on November 5, 2001.

When Gemini has made documentary submissions to the Civil Aviation Council over the past several months, Gemini has also submitted several requests for a temporary provisional permit to allow Gemini to operate scheduled all-cargo service to Ecuador while the final documentation requirements are being satisfied. Because these applications were not granted, Gemini made a further request again this week. In this regard, Gemini would appreciate any and all assistance that the U.S. Embassy in Quito and the Department might be able to provide to facilitate the issuance of interim authority to Gemini.

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300

U.S.- Ecuador All Cargo Frequency Allocations

Evergreen International Airlines, Inc. strongly opposes Gemini Air Cargo's most recent (November 5, 2001) attempt to gain an additional 30 days in which to commence U.S.-Ecuador scheduled all-cargo service pursuant to the valuable limited-entry rights Gemini received in this case over one year ago. Evergreen has previously opposed similar requests on the ground that Gemini has not exhibited diligence in pursuing its application to attain Ecuadorian approval for the scheduled services that the Department awarded Gemini in October 2000. That award was followed by months of apparently glacial (at best) activity by Gemini to obtain the required Ecuadorian approval. More recently, there has been a continuing string of unsatisfied Ecuadorian requirements, apparent misinterpretations by Gemini of those requirements and miscommunications with Ecuadorian authorities, as described in Gemini's own weekly reports. Amazingly, Gemini's November 16 Eleventh Interim Report reveals that Gemini has not yet satisfied the Ecuadorian requirement that it establish a corporate domicile in Ecuador, a straightforward requirement of which it has been aware for a very long time. Gemini's continued inability to meet its obligations to the Government of Ecuador underscores that the Department should remain, at a minimum, very concerned about Gemini's willingness to initiate scheduled service.

The Department has been patient in issuing extensions to Gemini, but patience has its limits. The Department should determine that the time has come for Gemini to take the steps needed, once and for all, to obtain the authorization it requires and commence scheduled service within a time certain or forfeit the valuable rights that it has wasted for over a year now. Evergreen thus submits that the Department fix a date in early December as the date by which Gemini must begin scheduled service or forego the right to do so. As has been the case for a very long time, Evergreen stands ready to begin service to Ecuador and is prepared to move forward vigorously to achieve that end.

Counsel:  Steptoe Johnson, David Coburn, 202.429.3000, dcoburn@steptoe.com 

Because Atlas Air, Inc. and Evergreen International Airlines, Inc. are not themselves applying to the Government of Ecuador for authority to operate scheduled all-cargo service, it is easy for them to criticize Gemini from the sidelines for the delay in Ecuadoran licensing. Neither Atlas nor Evergreen, however, can provide any assurance that they would be able to do any better if they were seeking similar authority.

Their criticism wholly discounts the extensive effort in time and money that Gemini has made and continues to make to comply with all Ecuadoran requirements. Gemini's weekly reports to the Department since early September reflect a dedicated effort to comply with all Ecuadoran requirements to the best of Gemini's ability and understanding. Gemini has attempted to provide complete and current information in each of its reports.

None of the remaining requirements have anything to do with aviation operations, and the Government of Ecuador allows Gemini to conduct charter operations. Although the National Aviation Council has not to date granted any of Gemini's requests for authority to operate scheduled service on an interim basis, Gemini is nonetheless hopeful that the Council will yet grant the company such interim authority while Gemini fulfills the final documentary requirements. The Department should not adopt any arbitrary deadline. Neither the Department nor Gemini has any knowledge or control over when the Government of Ecuador may act. Instead, as it has done thus far, the Department should continue to set the startup deadline based on the best information available to it at the time in question.

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300, airlaw@rollerbauer.com

U.S.- Ecuador All Cargo Frequency Allocations; Gemini Air Cargo, Inc.

By:  Paul Gretch

U.S.-Ecuador All-Cargo Frequency Allocation

On November 20, counsel for Gemini requested DOT Dockets Section to prepare a certified copy of the Notice of Action Taken on November 19, 2001. Gemini counsel received the certified copy on November 21, and forwarded it the same day to the Embassy of Ecuador for consularization. The consularized copy was received back from the Embassy of Ecuador today, November 26, and is being sent today via UPS to Gemini's representative in Ecuador.  

As soon as the Embassy receives the necessary documents, Gemini believes that the Embassy will promptly issue the "Certificate of Incorporation and Functioning." Gemini will then expedite delivery of the Certificate to Ecuador for filing. As soon as the "Superintendente de Compaiiias" receives the Certificate, that office can complete the processing of the pending Gemini application for a Certificate of Domicile.

As Gemini stated in its Interim Report of November 16, 2001, it is difficult to predict when the process to obtain a Certificate of Domicile and then to receive final authority will be completed. Gemini will continue to make every effort to satisfy all requirements so that it can receive scheduled authority by the current startup deadline of December 19, 2001.

Gemini has submitted several requests to the National Aviation Counsel over the past several months for temporary provisional authority to allow Gemini to operate scheduled all-cargo service to Ecuador while the company satisfies the final documentary requirements. Gemini made a further request on November 13. In this regard, Gemini would appreciate any and all assistance that the U.S. Embassy in Quito and the Department might be able to provide to facilitate the issuance of interim authority to Gemini.

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300, airlaw@rollerbauer.com

U.S.-Ecuador All-Cargo Frequency Allocation

Since its last Interim Report, Gemini operated a flight to Ecuador on the routing Miami (MIA) - Quito (UIO) - Guayaquil (GYE) - Miami (MIA) on November 28/29, 2001.

Gemini is subject to an official limit of 20 cargo charter flights to Ecuador per airline per calendar year. For the past several months, however, the Directorate of Civil Aviation (DAC) has been granting Gemini ad hoc permits to operate charter flights in excess of the official limit. On Friday, November 30, 2001, Gemini learned through its representative in Ecuador that the DAC might not grant Gemini any more charter flights this year, and Gemini’s representative yesterday confirmed that preliminary advice. Gemini is very concerned over this development and is making immediate inquiries to determine the reason for this shift in policy. Gemini will advise the Department as soon as it has additional information.

Gemini has submitted several requests to the National Aviation Counsel over the past several months for temporary provisional authority to allow Gemini to operate scheduled allcargo service to Ecuador while the company satisfies the final documentary requirements. Gemini made its most recent request on November 13. In this regard, Gemini renews its request for any and all assistance that the U.S. Embassy in Quito and the Department might be able to provide to facilitate the issuance of interim authority to Gemini.

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300, airlaw@rollerbauer.com

U.S.- Ecuador All-Cargo Frequency Allocation

Pursuant to the Notice of Action Taken in the above docket on November 19, 2001, Gemini Air Cargo, Inc., submits its weekly report regarding its progress toward obtaining authority from the Government of Ecuador to operate scheduled all-cargo service to Ecuador. Gemini has not operated any charter flights since November 28/29, 2001. As Gemini advised in its last Interim Report, Gemini is subject to an official limit of 20 cargo charter flights to Ecuador per airline per calendar year. Gemini has exceeded that number, and the Ecuadoran Directorate of Civil Aviation (DAC) will no longer grant Gemini ad hoc permits to operate charter flights in excess of that official limit. Gemini is concerned over this shift in Ecuadoran policy, but at this time still does not know of the reason for the change.

On December 5, 2001, Gemini obtained from the Embassy of Ecuador the "Certificado de Existencia, Constitucion Legal y Funcionamiento de Companias" (Certificate of Incorporation and Functioning) that is a requirement for the "Superintendente de Companias" of Ecuador to issue Gemini a Certificate of Domicile. The National Aviation Council requires Gemini to have a Certificate of Domicile before it will issue scheduled operating authority to Gemini.

On Friday, December 7, 2001, Gemini filed with the "Superintendente de Companias" the Certificate of Incorporation and Functioning, a revised Power of Attorney to its local representative, and certification that Gemini satisfies the requirement for the amount of funds to be kept on deposit in Ecuador.

Gemini has submitted several requests to the National Aviation Counsel over the past several months for temporary provisional authority to allow Gemini to operate scheduled allcargo service to Ecuador while the company satisfies the final documentary requirements. Gemini made its most recent request on November 13. In this regard, Gemini continues its request for any and all assistance that the U.S. Embassy in Quito and the Department might be able to provide to facilitate the issuance of interim authority to Gemini.

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300, airlaw@rollerbauer.com

Gemini has expended an extraordinary effort to obtain scheduled all-cargo authority from the Government of Ecuador -- more than it has expended to obtain authority from any other country. Other than continuing to ask the appropriate officials for prompt action, there is nothing more that Gemini can do or that Gemini must do to obtain scheduled authority from the Government of Ecuador. It would not be in the public interest, therefore, for the Department to deny this Application to extend the startup deadline, especially when any other airline designated by the United States would also face a long delay before it could commence scheduled flights to Ecuador. A refusal to grant the extension would also be a disservice to Ecuadoran officials who also have dedicated a substantial amount of time and energy to processing Gemini's applications, correspondence, and supporting documentation.

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300, airlaw@rollerbauer.com

U.S.- Ecuador All Cargo Frequency Allocations

Gemini has not operated any charter flights since November 28/29, 2001. As Gemini has advised in its last two Interim Reports, Gemini is subject to an official limit of twenty cargo charter flights to Ecuador per airline per calendar year. Gemini has exceeded that number, and the Ecuadoran Directorate of Civil Aviation (DAC) will no longer grant Gemini ad hoc permits to operate charter flights in excess of the official limit.  

On December 11, Mr. Raymond Lawlor, Gemini's Senior Vice President of Marketing, flew to Ecuador in an effort, inter alia, to obtain short-term authority for Gemini to operate flights to Ecuador on a charter or wet lease basis. That effort was unfortunately unsuccessful, and Ecuadoran authorities continue to deny Gemini's requests for limited operating authority. Gemini has not determined why the DAC continues to deny Gemini's requests, but Gemini will continue its efforts to obtain short-term authority while it awaits action on its application for scheduled rights. Documentary Requirements & Timing for Issuance of Scheduled Authority Gemini has done everything required in order to receive scheduled authority from the Government of Ecuador and is awaiting action by the "Consejo Nacional de Aviacidn" (National Aviation Council) on its application.

Gemini expects the Consejo to issue Gemini authority at its next meeting. The Consejo normally meets on Wednesday of each week, but the Consejo did not meet this week, on December 12. The next meeting would ordinarily be next Wednesday, December 19, 2001, but the Consejo has not confirmed that it will meet on that date. Indeed, due to the holiday period, it is possible that the Consejo will not meet again until January 9, 2002. As Gemini indicated in its Application of December 10 for an extension of the current deadline of December 19 to start scheduled service to Ecuador, Gemini may be unable to receive scheduled authority until some time in January, 2002, because the Consejo may not act on Gemini's application any sooner.

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300, airlaw@rollerbauer.com 

U.S.-Ecuador All-Cargo Frequency Allocation

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300, airlaw@rollerbauer.com

In view of the circumstances presented, we have decided to grant Gemini's latest request for an extension of the startup deadline. We continue to believe that the record supports a finding that Gemini is continuing its good faith effort to secure the necessary license from Ecuador. In these circumstances, we believe that extension of the startup deadline is warranted. We expect Gemini to continue to report to the Department on a weekly basis on its progress.

By:  Paul Gretch

U.S.- Ecuador All Cargo Frequency Allocations

Gemini expects the Consejo to issue Gemini authority at its next meeting. The Consejo normally meets on Wednesday of each week, but the Consejo did not meet on December 12 or on Wednesday of this week, December 19. The next two Wednesdays are December 26, 2001, and January 2, 2002, but due to the holiday period, it is possible that the Consejo will not meet again until January 9, 2002. Gemini may therefore be unable to receive scheduled authority until some time in January, 2002, because the Consejo may not act on Gemini's application any sooner.

Gemini has not operated any charter flights since November 28/29, 2001. As Gemini has advised in its recent Interim Reports, Gemini is subject to an official limit of twenty cargo charter flights to Ecuador per airline per calendar year. Gemini has exceeded that number, and the Ecuadoran Directorate of Civil Aviation (DAC) will no longer grant Gemini ad hoc permits to operate charter flights in excess of the official limit.

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300, airlaw@rollerbauer.com 

U.S.-Ecuador All-Cargo Frequency Allocation

Charter Flights Gemini has not operated charter flights to Ecuador since November 28/29, 2001. As Gemini has advised in its recent Interim Reports, Gemini is subject to an official limit of twenty cargo charter flights to Ecuador per airline per calendar year. Gemini exceeded that number, and the Ecuadoran Directorate of Civil Aviation (DAC) has not granted Gemini ad hoc permits to operate charter flights in excess of the official limit.

Gemini is currently making plans to operate charter flights in 2002, but its efforts to obtain charter authority have been hindered by limited government operations in Ecuador due to the end of year holiday period.

As Gemini has reported in its recent Interim Reports, the company has satisfied the Ecuadoran requirements for scheduled authority and is awaiting action by the "Consejo Nacional de Aviacion" (National Aviation Council) on its application.

Gemini expects the Consejo to issue Gemini authority at its next meeting. The Consejo normally meets on Wednesday of each week, but the Consejo did not meet on December 12, December 19, or on Wednesday of last week, December 26. The next Wednesday is January 2, 2002, but due to the holiday period, it is possible that the Consejo will not meet again until January 9, 2002. Gemini may therefore be unable to receive scheduled authority until some time in January, 2002, because the Consejo may not act on Gemini's application any sooner.

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300, airlaw@rollerbauer.com

U.S.-Ecuador All-Cargo Frequency Allocation

On December 20, 2001, Gemini applied to operate eight charter flights during January, 2002 -- two flights during each of four weeks. By a letter dated December 26, 2001, the Director General of the DGAC denied the application for reasons that Gemini does not regard as valid. The DGAC stated that it was denying the application because the "Consejo Nacional de Aviación" (National Aviation Council) had not granted Gemini provisional authority to operate scheduled service and because Gemini had not initiated the last phase of its Ecuadoran Part 129 certification, a step that is dependent upon the receipt of Gemini’s scheduled authority from the Consejo. On December 27, 2001, Gemini’s representative wrote to the DGAC and sought reconsideration of the denial. Gemini pointed out that authority to operate charter flights was not subject to the DGAC’s conditions under either the Air Transport Agreement between the United States and Ecuador or Ecuadoran law. Indeed Gemini operated many charter flights to Ecuador in 2001 without holding scheduled authority. On January 3, 2002, Gemini requested a response to its December 27 letter seeking reconsideration, but by a letter also dated January 3, 2002, the DGAC reaffirmed the denial issued in its letter of December 27, 2001.

Gemini expects the Consejo to issue scheduled authority to Gemini at its next meeting, The Consejo normally meets on Wednesday of each week, but due to the end of year holiday period the Consejo did not meet on December 12, 19, or 26, 2001, or on Wednesday of last